Is the Trend Your Friend?

April 14, 2009

As of Tuesday's Dow Jones Industrial Average (DJIA) market close of 7,920.18, we are just about back to February 2, 2009, when that average closed at 7,936.83.  Essentially, the DJIA has neither moved up nor down for about two and a half months. That's a lot of sideways. However, given how dire things seemed then, that's quite a surprising fact; and all the more so when you remember that on March 9th the DJIA was at 6,547.05, or some 1,400 points below where we now stand.  On the other hand, we closed at 9,015.10 on January 6, 2009, so let's not start celebrating the net loss to date of 1,000 points.

My newfangled tool for taking the market's temperature seems likely to get a test today.  We have not had three DOWN days in a row since February 23, 2009 (or March 3rd if you want to embed the three-days into a five-day DOWN pattern). Since March 3rd, we have had only one and two day DOWN trends, but nothing longer--that string seems in for a critical test today.

Make of it what you will. I'm not predicting anything. Like I've been saying, I'm simply reading a thermometer

If we break the recent string and put in a three-day DOWN trend, does that indicate a meaningful change of investor sentiment -- and is that only for the near term?  Okay, folks, place your bets before the market opens today.  All hands off the table.

DATE DJIA P(L) TICK TREND CUM TREND
15-Apr-09          
14-Apr-09 7,920.18 -12.145% DOWN   -6
13-Apr-09 8,057.81 -10.619% DOWN   -6
9-Apr-09 8,083.38 -10.335% UP 2 -6
8-Apr-09 7,837.11 -13.067% UP   -8
7-Apr-09 7,789.56 -13.594% DOWN -2 -8
6-Apr-09 7,975.85 -11.528% DOWN   -6
3-Apr-09 8,017.59 -11.065% UP 4 -6
2-Apr-09 7,978.08 -11.503% UP   -10
1-Apr-09 7,761.60 -13.904% UP   -10
31-Mar-09 7,608.92 -15.598% UP   -10
30-Mar-09 7,522.02 -16.562% DOWN -2 -10
27-Mar-09 7,776.18 -13.743% DOWN   -8
26-Mar-09 7,924.56 -12.097% UP 2 -8
25-Mar-09 7,749.81 -14.035% UP   -10
24-Mar-09 7,660.21 -15.029% DOWN -1 -10
23-Mar-09 7,775.86 -13.746% UP 1 -9
20-Mar-09 7,278.38 -19.265% DOWN -2 -10
19-Mar-09 7,400.80 -17.907% DOWN   -8
18-Mar-09 7,486.58 -16.955% UP 2 -8
17-Mar-09 7,395.70 -17.963% UP   -10
16-Mar-09 7,216.97 -19.946% DOWN -1 -10
13-Mar-09 7,223.98 -19.868% UP 4 -9
12-Mar-09 7,170.06 -20.466% UP   -13
11-Mar-09 6,930.40 -23.125% UP   -13
10-Mar-09 6,926.49 -23.168% UP   -13
9-Mar-09 6,547.05 -27.377% DOWN -1 -13 4/d of 1/d
6-Mar-09 6,626.94 -26.491% UP 1 -12  
5-Mar-09 6,594.44 -26.851% DOWN -1 -13  
4-Mar-09 6,875.84 -23.730% UP 1 -12  
3-Mar-09 6,726.02 -25.392% DOWN -5 -13 5/d DOWN
2-Mar-09 6,763.29 -24.978% DOWN   -8  
27-Feb-09 7,062.93 -21.654% DOWN   -8  
26-Feb-09 7,182.08 -20.333% DOWN   -8  
25-Feb-09 7,270.89 -19.348% DOWN   -8  
24-Feb-09 7,350.94 -18.460% UP 1 -8  
23-Feb-09 7,114.78 -21.079% DOWN -3 -9 3/d DOWN
20-Feb-09 7,365.67 -18.296% DOWN   -6  
19-Feb-09 7,465.95 -17.184% DOWN   -6  
18-Feb-09 7,555.63 -16.189% UP 1 -6
17-Feb-09 7,552.60 -16.223% DOWN -3 -7
13-Feb-09 7,850.41 -12.919% DOWN   -4
12-Feb-09 7,932.76 -12.006% DOWN   -4
11-Feb-09 7,939.53 -11.931% UP 1 -4
10-Feb-09 7,888.88 -12.493% DOWN -2 -5
9-Feb-09 8,270.87 -8.255% DOWN   -3
6-Feb-09 8,280.59 -8.148% UP 2 -3
5-Feb-09 8,063.07 -10.560% UP   -5
4-Feb-09 7,956.66 -11.741% DOWN -1 -5
3-Feb-09 8,078.36 -10.391% UP 1 -4
2-Feb-09 7,936.83 -11.961% DOWN -3 -5
30-Jan-09 8,000.86 -11.250% DOWN   -2
29-Jan-09 8,149.01 -9.607% DOWN   -2
28-Jan-09 8,375.45 -7.095% UP 3 -2
27-Jan-09 8,174.73 -9.322% UP   -5
26-Jan-09 8,116.03 -9.973% UP   -5
23-Jan-09 8,077.56 -10.400% DOWN -2 -5
22-Jan-09 8,122.80 -9.898% DOWN   -3
21-Jan-09 8,228.10 -8.730% UP 1 -3
20-Jan-09 7,949.09 -11.825% DOWN -1 -4
16-Jan-09 8,281.22 -8.141% UP 2 -3
15-Jan-09 8,212.49 -8.903% UP   -5
14-Jan-09 8,200.14 -9.040% DOWN -5 -5
13-Jan-09 8,448.56 -6.284% DOWN   0
12-Jan-09 8,473.97 -6.002% DOWN   0
9-Jan-09 8,599.18 -4.614% DOWN   0
8-Jan-09 8,742.46 -3.024% DOWN   0
7-Jan-09 8,769.70 -2.722% DOWN   0

6-Jan-09

9,015.10

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